Table of Contents:

​Q&As as of 25-Nov-22.

A. Communication

1. What steps has Defi Payments taken to ensure that all emails sent by the wider body of creditors to the CC are received in their native text, and with original attachments, by CC members?

Defi Payments has set up an email forwarding mechanism where emails received from the general body of creditors via [email protected] are directly forwarded to the CC members’ individual email addresses. However, CC members may choose to be individually excluded from the email forwarding mechanism and we have received one such request.

2. What other steps has Defi Payments taken to improve communications with the wider body of creditors?

Defi Payments has strived to provide creditors with updates to the extent possible by way of regular email blasts, the Telegram support group, the direct messaging function on the Vauld online platform and FAQ page.

We will continue to provide email blasts and update the FAQ for material progress when available. We also continue to hold regular meetings with the CC where feedback / queries from the wider body of creditors are also brought to us by CC members.

B. Committee of Creditors

1. Who are the members of the CC?

The members of the CC are customers of Vauld who have been selected on the basis of having no conflict of interest and overall are representative of the general body of creditors based on (i) jurisdiction of the creditor’s domicile (i.e. India, covering 91% of creditors by number, and Rest of World) and (ii) the quantum of their claims against Defi Payments in USD equivalent.

Certain members of the CC have identified themselves on public forums. However, we are not at liberty to name members of the CC due to privacy reasons. Notwithstanding, there are 4 members who have consented to their identities being disclosed to the general body of creditors – namely, Divyanth Jayaraj, Joel Joseph Kailath, Niket Agrawal and Dhrubajyoti Sarma.

C. FTX

1. Please confirm if Counterparty A is FTX.

We can confirm that Counterparty A is neither FTX nor Alameda.

2. What is the impact of FTX’s and Alameda’s Chapter 11 filing to Vauld?

In relation to Nexo’s potential acquisition of Vauld, Nexo has confirmed via its official Twitter account on 8 November 2022 that it has $0 net exposure to FTX/Alameda. As part of its stringent risk controls, Nexo has indicated that it withdrew its entire balances from the exchange prior to FTX’s and Alameda’s Chapter 11 filing.

For Vauld, it has exposure to FTX which amounts to USD6m as communicated to the CC at the 3rd meeting.

D. Potential Nexo Acquisition

1. What is the latest status of discussions with Nexo?

Nexo was supplied with the draft terms of the restructuring on 19 October 2022. On 7 November 2022, Nexo proposed alternative terms of the restructuring in the form of an ‘Indicative Structure for an Asset Purchase Transaction’ in writing, including a high-level overview of proposed terms (the “Nexo Proposal”). On 19 November 2022, Nexo attended a meeting with Defi Payments, its advisors and the CC to present its terms. Discussions are ongoing regarding the Nexo proposal.

E. India Funds

1. What is the latest status of the freeze by the Enforcement Directorate on Flipvolt’s assets in India?

Vauld Group continues to provide full cooperation with the Enforcement Directorate in their investigations and reasonably expect that the assets will be made fully available to Flipvolt in approximately one year.

F. Moratorium

1. When will Defi Payments’ moratorium end?

Defi Payments’ moratorium will end on 20 January 2023. We note that in our 1st Affidavit of Sanju Sony Kurian dated 25 November 2022, paragraph 4 states that “the Court granted an extension of the Moratorium Order until 20 January 2022”.

Kindly take note that this was a typographical error, and it should read 20 January 2023 instead.

2. Will Defi Payments seek for another extension prior to the end of the moratorium (i.e. 20 January 2023)?

The extension of the moratorium will depend on the timeline of the restructuring, discussions with Nexo on a potential acquisition and other third-party professional crypto asset managers. It is anticipated that given the statutory requirements to run the Scheme of Arrangement, a further extension will be necessary.

G. Restructuring

1. How were the discounts applied to the total realisable assets of Defi Payments as at 1 August 2022 under the Liquidation scenario calculated? (i.e. the 29% discount for Base and 40% discount for Low).

The discounts under the Liquidation scenario were based on a combination of factors as set out in slide 14 of the 1st CC Meeting presentation slides dated 10 October 2022. This includes the possible non-cooperation of counterparties, early realisation of illiquid assets, significant liquidators’ fees and expenses that would be expected to be incurred in connection with asset recovery efforts and possible commencement of or to defend lengthy legal proceedings.